Tips for the New Year

It’s that time of year — the time to ring out the old and ring in the new, to ditch bad habits and replace them with good ones. We can’t guarantee you’ll lose weight, or become a better human being, but we can give you some suggestions to help you whip your finances into shape. Here are some tips for the New Year.

1. Save and invest. Don’t underestimate your ability to save and invest. With compound interest, even modest investments now can grow over time.

2. Lighten your credit load. Paying off high-interest debt may be your best investment strategy. Few investments pay off as well, or with less risk than, eliminating high-interest debt on credit cards or other loans.

3. Boost your "rainy-day" fund. Many experts recommend keeping about six months of expenses in a federally insured account to cover sudden unemployment or other emergencies.

4. "Sure thing" is fine as an expression but not as an investment pitch. Promises of guaranteed high returns, with little or no risk, are a classic warning sign of fraud. The potential for greater returns typically comes with greater risk. You know the saying -- if it sounds too good to be true, it probably is.

5. Take charge of your money. If you don’t know where it goes, start keeping track. There are plenty of tools, such as FinanceWorks, to help you set a monthly budget and stick to it.

6. Pay yourself first. Put yourself at the top of your "payee" list. Regular automatic deductions from your paycheck or bank account into a savings or investment account will keep you on track toward your short and long-term financial goals.

7. Know your investment self. You’re the best judge of yourself. Use that knowledge to find investments that are a good match for you, based on your goals and your ability to tolerate risks.

8. Make sure your older investments still fit you. Take time to review your holdings and see if they’re still appropriate for you. If you’ve outgrown them, it’s probably time to sell them and buy something better suited to you.

9. Don’t put all your eggs in one basket. One way to reduce the risks of investing is to diversify your investment holdings. Think twice before investing heavily in shares of your employer’s stock or any single investment.

10. Ignorance isn’t always bliss, especially when it comes to your account statements. Sure, it can hurt to look at statements when investments are losing value. But if you don’t review your statements, you may miss problems in your accounts that are unrelated to performance.

11. Do your homework. Asking questions about financial opportunities and checking out the answers with unbiased sources can help you make informed choices and avoid fraud.